Ebrahim Patel, the minister of trade, industry, and competition, has declared that his office will complete its electric vehicle (EV) policy by March 2024.
Patel stated that the department’s EV strategy will be finalized by the conclusion of the current fiscal year, which runs until March 31, 2023.
Heavyweights in the automotive industry, including the National Association of Automobile Manufacturers of South Africa (Naamsa), urged the government to swiftly reveal its plans for EV manufacturing in the nation.
Among the complainants was Naamsa president Neale Hill, who said manufacturers would not be guaranteed to invest in South Africa and that the government’s dragging its feet wouldn’t help the issue.
“South Africa has already missed the upcoming round of EV model investment, for which the decision date is three years before the start of production, and realistically will only be considered for the next round of investment around 2030,” said Hill.
The Department of Trade, Industry, and Competition’s acting director-general, Malebo Mabitje-Thompson, said the government has made it clear that it favors a manufacturing-focused approach.
“We want to ensure that what the transition doesn’t do is undo all the benefits we have built together as partners,” she said in reference to car manufacturers.
Some of the world’s best-known vehicle manufacturers produce cars in South Africa, creating many jobs in areas such as East London and Kariega (formerly Uitenhage).
However, without a clear policy on EV manufacturing in South Africa, the country risks losing brands like Mercedes and Volkswagen as the rest of the world transitions to EVs.
“We don’t want to risk South Africa becoming the last place where internal combustion engines [ICEs] are produced while other markets are busy with EVs,” Mabitje-Thompson said.
RMB corporate client segment head Nana Phiri and Wesbank CEO Ghana Msibi said they were encouraged by Minister Patel’s commitment to finalizing the EV strategy.
Msibi said South Africa has a unique opportunity to lead the continent in mitigating climate change given its rich natural resources, including coal, natural gas, wind, and solar power.
“The country’s automotive industry is one of the largest in Africa and a significant contributor to the domestic economy, so it needs to transition quickly and successfully to new energy vehicles (NEVs),” he said.
Msibi noted that Africa currently has a small share in global vehicle manufacturing, despite the potential to add value to the minerals required for battery electric vehicles (BEVs).
Wesbank said NEVs face other challenges in gaining wider acceptance among South African consumers.
These include constraints on product availability, a lack of awareness around range anxiety and the cost of ownership, uncertainties around the reliability of electricity supply, and a limited understanding of the technology.
“A significant challenge for all stakeholders continues to be the lack of customer education on the advantages of NEVs, particularly BEVs,” added Msibi.
The significant initial expenditure necessary to develop a dependable and effective national charging infrastructure has been “another major barrier to wider adoption of NEVs in South Africa.”
Msibi stated that although they observe a noticable increase in the financing of hybrids, pure electric vehicle sales continue to be subdued.
“It is crucial that we get past the obstacle we face in finalizing policies and regulations pertaining to the long-term viability and sustainability of the South African automotive industry so that we can make decisions with confidence and advance.”
